ADVERTISING

You Always Remember Your First Negative

Leading off today’s Tour de Big Tech is Google, which will lose 5.3% of its net U.S. advertising revenue this year, eMarketer said yesterday. It’s not just that this is the first ever decline in ad revenue for Google—minus the 2008 financial crisis, revenue’s grown by double digits every single year. 

• YouTube ad revenue is still expected to rise, but there aren’t enough Cuomo PowerPoint replays to make up for the 7.2% hit to Google Search revenue.

What happened: Faced with plummeting demand, pandemic restrictions, and potential layoffs, many companies trimmed marketing budgets early in the crisis. Travel, one of the hardest hit sectors, is a particularly large client of Google’s ad business.

• Expedia typically spends $5 billion on advertising. This year, execs don’t think their bill will hit $1 billion. 

Before you set up a GoFundMe...Google’s still expecting almost $40 billion in ad revenue this year (it did $41.8 billion in 2019). And eMarketer says that could rebound more than 20% next year.  

The bigger picture

If eMarketer’s projections hold up, Google might cede some of its 32% market share to its biggest competitors, who escaped the sucker punch from the travel companies.

With 2019 ad revenues of $10.3 billion, Amazon’s in a distant third place, but it may finally be able to round up and claim 10% of the market. 

In second is Facebook, where 2020 ad revenue is expected to grow 5% to $31.4 billion. It’s not the 26% growth rate of 2019, but with a pandemic in the mix, Zuck will take it. Especially when he’s dealing with a mini-advertiser revolt...

• Civil rights groups called on advertisers to pull July Facebook spend in protest of the platform’s handling of political hate speech. North Face, Upwork, REI, and Patagonia said they’re in. 

Bottom line: Since 2016, Google’s ad revenue hasn’t kept pace with growth in the larger digital ad market, leaving the door open for Facebook, Amazon, and others to step in.

IMMIGRATION

That’s One Way to Limit Foreign Travel

When one door closes, President Trump likes to lock up and keep it that way. Yesterday, the president signed an order suspending some employment-based visas through the end of 2020, including: 

• H-1B visas for high-skilled workers 
• H-2B visas for nonagricultural seasonal workers (like hospitality)
• L-1 visas for internal company transfers

Trump is also extending a temporary ban from April that restricts some foreigners from getting green cards. Senior officials told the WSJ the orders will block 525,000 people from entering the U.S. this year, including 170,000 green-card holders.

Trump’s reasoning: With unemployment at 13.3%, the administration wants to prioritize getting American workers back on payrolls. 

Critics argue just because a job is open doesn’t mean a domestic worker can fill it. Tech companies and business groups have criticized efforts to curtail H-1Bs, which each year allow ~85,000 high-skilled foreign workers to bring their talents to the U.S. economy, especially in STEM fields.

• Then there’s politics. Some critics are accusing the president of leveraging a public health crisis to push through his immigration agenda. 

Looking ahead...the administration is working on more permanent reforms that would affect H-1B visas and work permits for asylum seekers.

STARTUP

If You Couldn't Design Before, Now You Canva

Canva, the Sydney-based startup TechCrunch calls the “design platform for non-designers,” just closed a fundraising round at a $6 billion valuation, up from a $3.2 billion valuation in 2019.

• Canva said yesterday that it raised $60 million led by Sequoia China and Blackbird, but turned down much more. 
• “We could’ve raised $2 billion, but I think that would have been a really stupid thing to do,” cofounder Cliff Obrecht told Forbes in a flawlessly executed humblebrag.

Sharing is caring

Like every other company except for Zoom, Canva wasn’t sure if COVID-19 would help or hurt its business. 

• Narrator: It helped. By focusing on its collaborative tools, design creations and sharing on Canva have risen over 50% since the pandemic began. 
• It also recently partnered with FedEx Office to help power its push into the U.S.

Bottom line: With more than 30 million monthly users, 1.5 million of whom pay for Canva Pro, Canva is more concerned with being undervalued relative to other software companies. “It’s a valuation we’ve probably outgrown already,” said Obrecht, who decided to just ditch the humble.

SPONSORED BY THE MOTLEY FOOL

You’d Know If We Weren’t Being Honest

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LEGAL

Supreme Court Puts a Lid on the SEC

People ask us how we decide which stories appear in this newsletter. Here’s one rule: If it contains the word “disgorgement,” you must write about it.

Especially when it’s the subject of a big Supreme Court decision. Yesterday, the court reined in the Securities and Exchange Commission’s ability to seek “disgorgement,” a practice in which the agency collects money from fraudsters. 

• In the 8–1 blowout decision, the Supreme Court said the SEC could still ask defendants to forfeit money…
• ...but the amount to be disgorged is now capped at the profits acquired through the fraud—nothing more.

The case in question: A California couple was ordered by the SEC to disgorge more than $26 million after they were found to have defrauded foreign investors over a cancer treatment center that was never built.

Why it matters: The SEC says it collected $1.5 billion through disgorgements and penalties last fiscal year and paid out $1.2 billion to defrauded investors. It's probably relieved the court didn't eliminate the practice altogether.

+ The big question...who’s going to make an “Ithaca Is Disgorges” t-shirt now?

GAMING

What Do Microsoft and a Confused Baker Have in Common?

They’ve both lost their Mixers. In a kinda-shocking-but-not-altogether-unexpected move, Microsoft announced it was shutting down its streaming platform Mixer after failing to attract enough viewers to compete with rivals like Twitch and YouTube. 

• Zuck is sweeping up the crumbs: On July 22nd, all Mixer apps and sites will redirect to Facebook Gaming. 

If we’re talking streaming...

We have to mention Ninja. The face of Fortnite made tsunamis in the gaming community when he signed an exclusive deal with Mixer back in August of 2019. 

• Now, he’s a free agent after turning down an offer from Facebook reportedly worth double the Mixer deal that earned him around $30 million. 
• But he's in an awkward situation because he burned some bridges with Amazon’s Twitch when he left.

Zoom out: After Mixer’s demise, all thumbs at Microsoft HQ will get to work on xCloud, a “Netflix for video games” that Kareem Choudhry, head of Microsoft’s cloud gaming division, hopes will eventually reach 2 billion gamers.

WHAT ELSE IS BREWING

• Apple said it would start making its own processors for the Mac, ditching a 15-year partnership with Intel. 
• Bill Ackman, a billionaire investor, announced a new blank-check company that will invest in “Mature Unicorns.” 
• Texas Gov. Greg Abbott said the coronavirus was spreading in his state at an “unacceptable rate.” 
• American whiskey distillers lost more than $300 million in export revenue due to trade disputes between the U.S. and the EU, per a new report.
• North Coast Organics released a Grateful Dead-branded line of deodorant, which raises a good question—if you could smell like any band, which would it be? For us, it’s the Jonas Brothers.

BREW'S BETS

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Tech Tip Tuesday: Here’s a rundown of the biggest announcements at Apple’s WWDC conference yesterday, plus an article about iOS upgrades specifically.

Seeing is believing: The Pudding is back again with two amazing data visualizations about 1) whether your name will be the next Karen and 2) music that’s fading from generational memory (this one’s a test). 

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FROM THE CREW

Events 'R' Us

Morning Brew is hosting virtual events to help you stay informed about the business world and level up your career. Here are two happening this week...

Learn how to focus: If you're easily distracted and looking for strategies to work with purpose, you'll want to check out a 45-minute conversation between Morning Brew CEO Alex Lieberman and bestselling author Nir Eyal, who's spent decades researching and distilling strategies for supercharging productivity. The details: 9:30am ET Friday, your computer. .

Any Mr. Wonderful fans in the house? Kevin O’Leary and Connor O’Brien will be sitting down with Business Casual host Kinsey O’Grant (had to) to answer all your questions on investing, ETFs, and more. The details: 1pm ET Wednesday, your computer. . 

GUESS THE CHART

The chart from Gothamist shows the rise in complaints about what activity in NYC this month? 

Gothamist

GUESS THE CHART ANSWER

Fireworks. Seriously, what is going on?